RightFiguresSale price, then the costs you enter
Commission is the expected sale price times the commission percent you type. That amount rounds half up to the nearest cent. A $1.00 sale at 0.5% is an exact half-cent and becomes $0.01 of commission.
Selling expenses add four amounts that stay separate:
- the commission just calculated
- other seller closing costs
- seller concessions
- other sale expenses
Total loan and lien payoffs add the mortgage payoff and any additional lien payoffs. Estimated net proceeds are the sale price minus selling expenses minus those payoffs. If that result is negative, the shortfall is the cash required to close. A result of $0.00 means the entered costs use the full sale price, so nothing remains and no extra cash is required.
Payoff quote, not a statement balance
Use the payoff quote for the day you are planning, not the principal shown on a monthly statement. A statement balance leaves out interest through the payoff date and any fees the lender includes in the quote. If a prepayment charge is already inside that quote, do not type it again. If it is not inside the quote, put it in other closing costs or other sale expenses only when you know the amount.
Taxes, transfer fees, recording fees and prorations count only when you type them into a cost or payoff field. This calculator does not look up a local fee schedule.
Do not enter the same cost twice
The commission field already calculates the commission. Do not also include that commission in other seller closing costs. Seller concessions are their own field. Do not also include those credits in closing costs or other sale expenses. A repair or other sale cost belongs in other sale expenses only when it is not already in closing costs.
Worked example
A $450,000.00 sale, a $280,000.00 mortgage payoff, no other liens, a 5.5% commission, $4,500.00 of other closing costs, $3,000.00 of concessions and $1,200.00 of other sale expenses:
- Commission: $24,750.00
- Total selling expenses: $33,450.00
- Total loan and lien payoffs: $280,000.00
- Estimated net proceeds: $136,550.00
- Cash required: $0.00
The same sale at a 100% commission, with every other cost at $0.00, uses the full sale price. Net proceeds and cash required are both $0.00. That is not a shortfall.
When the sale does not cover the costs
A $200,000.00 sale, a $190,000.00 mortgage payoff, $5,000.00 of other liens, a 6% commission, $8,000.00 of other closing costs, $2,000.00 of concessions and $1,500.00 of other expenses produces a $18,500.00 shortfall. The result is labeled as cash required. It is not money received.
What this estimate leaves out
Capital gains, depreciation recapture and other income taxes are not calculated. IRS Publication 523 is the tax publication for selling a home; this page does not apply it. A buyer’s loan, a local transfer-tax table and a settlement agent’s final statement can differ from the numbers you type. The mortgage calculator, refinance calculator and cap rate calculator answer different questions.
Sources & review
- What fees or charges are paid when closing on a mortgage and who pays them? — Consumer Financial Protection Bureau
- Publication 523, Selling Your Home — Internal Revenue Service
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational estimate only. A closing statement, a tax return and a lender’s payoff quote can differ from the amounts you enter.